System and method of revenue creation and economic stimulation that preserves a progressive tax structure and utilizes incentives and penalties to form the basis of taxation

Abstract

A system and method of revenue creation and economic stimulation that preserves a progressive tax structure and utilizes incentives and penalties to form the basis of taxation. One goal is to alter the saving and spending patterns of people in a manner beneficial to the economy, the individual, the government, and possibly targeted industries requiring remedial action or stimulation. Thus a predicted result is that economic productivity will increase employment, savings, and spending generation.

What is claimed: 
     
         1 . A system and method of revenue creation and/or economic stimulus utilizing at least one of incentive(s) and/or penalty(ies) comprising of the following:
 A) higher taxation of savings; and/or   B) lower taxation of income spent on goods and/or services.   
     
     
         2 . The system and method of  claim 1  further comprising reduction of the base income tax rate. 
     
     
         3 . The system and method of  claim 2 , wherein the criteria for said reduction is in part or in whole, specific to the Taxpayer's Individual Situation. 
     
     
         4 . The system and method of  claim 1 , wherein said higher taxation of savings initiates at a threshold value where said threshold value is defined by and/or initiated at at least one hard or soft threshold breakpoint. 
     
     
         5 . The system and method of  claim 4  wherein said at least one hard or soft threshold breakpoint is adjustable. 
     
     
         6 . The system and method of  claim 4  wherein there are many hard and/or soft threshold breakpoints. 
     
     
         7 . The system and method of  claim 4 , wherein said taxation of savings occurs above said threshold value which is a hard or soft threshold breakpoint and said taxation of savings below said threshold value which is a hard or soft threshold breakpoint is zero. 
     
     
         8 . The system and method of  claim 4  wherein said higher taxation of savings that initiates at said threshold value where said threshold value is defined by at least one mathematical equation. 
     
     
         9 . The system and method of  claim 3 , further comprising of the percentage or amount of taxation being further based upon the type of spending. 
     
     
         10 . The system and method of  claim 9 , wherein said type of spending alters and/or redefines parameters in at least one mathematical equation defining how savings is taxed. 
     
     
         11 . The system and method of  claim 9 , wherein said type of spending alters and/or redefines said parameters in a mathematical equation defining the percentage or amount of taxation. 
     
     
         12 . The system and method of  claim 10 , wherein said type of spending alters and/or redefines said parameters in said at least one mathematical equation and a hard or soft threshold breakpoint at which taxation of savings occurs above said hard or soft threshold breakpoint and said taxation of savings below said hard or soft threshold breakpoint is zero. 
     
     
         13 . The system and method of  claim 9 , further comprising the step of awarding Entitlement Credit earned by use of a formula using at least one said type of spending as a variable. 
     
     
         14 . The system and method of  claim 13 , wherein said Entitlement Credit award earned is further dependant upon said type of spending. 
     
     
         15 . The system and method of  claim 4 , wherein there is an alteration or allocation of the composition of savings which is in whole or in part between liquid and material assets which further may alter or redefine parameters in at least one mathematical equation and/or the savings said threshold and/or penalty associated with the types of savings and/or assets. 
     
     
         16 . The system and method of  claim 15 , wherein an effect of said alternation will not cause uncontrolled Inflation in whole or in part, and additional money can be collected after recirculation. 
     
     
         17 . The system and method of  claim 16  wherein inflation can be controlled, adjusted, and/or affected through adjusting the parameters in at least one mathematical equation (amount that can be saved with no taxation, tax rate, penalty, amount of inducement for various types of expenditures) which allows for the ability to stimulate and/or manipulate the economy in whole or in part. 
     
     
         18 . A system and method by which a change in rate of percentage of money paid to a second party is gradually phased in wherein three regimes are defined as follows:
 Regime 1 is defined as the region in which a lower rate is charged and/or paid below a lower threshold breakpoint;   Regime 2 is defined as the region in which a transitional rate is gradually phased in whereby said transitional rate changes from said lower rate corresponding to said lower threshold breakpoint to an upper rate corresponding to an upper threshold breakpoint, and said transitional rate does not affect monies paid within said regime 1;   Regime 3 is defined as the region in which said upper rate is charged and/or paid above a said upper threshold breakpoint, and said upper rate does not affect the monies paid within either said regime 1 or said regime 2.   
     
     
         19 . A system and method by which an entitlement is gradually phased out as income increases. 
     
     
         20 . The system and method of  claim 1  wherein the revenue generated by a lesser tax rate applied later in time to a larger collective income plus the taxable revenue generated by spending greater monies for goods and services produces greater net income than that generated by a greater tax rate applied earlier in time to a lesser collective income plus the taxable revenue generated by spending lesser monies for goods and services.